Renewal Time Is Here

calendar3-240x240We’ve now entered Renewal season for existing health insurance policies. Open enrollment for people new to Covered CA doesn’t start until November 1, but those with existing policies can make any necessary changes and renew their policies now.

Has anything changed in your life or income? A new member of the family? A child who is no longer a dependent? Have you moved? Did you get a raise? Did your income go down? Did you get a new job or lose a job? If there have been changes we’ll need to open a Change Report and enter the new information into the system that way. If there will be changes for next year, but things haven’t changed for this year, we report that by beginning the renewal process directly.

Once all information has been entered, you can select your policy for next year. Some of the carriers have new types of policies and premiums will be quite different. However, for those who have subsidized policies, the out-of-pocket share does not seem to be going to go up too much. That share is still based primarily on  household income.

There is one new carrier in our Central Coast market area, United Healthcare. Many Dignity doctors are on their network provider list. They don’t seem to have a contract with PAMF at this time. Other independent providers are also in their PPO network.

If you want to get a sense of what your premium might be before making any changes, I’ve found the Shop and Compare tool at works with Chrome or Internet Explorer better than with Firefox. I haven’t tried it with Safari.

This year Pozos Insurance Services also offers Aflac supplemental policies that can enhance your protection by providing benefits to fill some of the gaps in traditional health insurance policies. Accident, disability, hospitalization, cancer, dental, and vision supplemental policies are available to groups and individuals. We also offer life insurance.

As always, if you have questions or need help with selecting or managing your policy or Covered California account, or if you’d like to know more about life insurance or Aflac options, please contact us. We’re happy to help you with these important decisions about protection for you and your family.

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Insurers Phase Out Policies Regularly and Could Do So Now

Canceled - MS clip art

Health care insurers phase out policies regularly. A long-standing practice, health insurance companies continuously evaluate the profitability of their products and stop selling them to new customers when they become unprofitable.

What is Normal for a Health Insurance Policy?

New policies often have lower premiums and are very attractive when first placed on the market. Individuals, families, and small businesses flock to the new policy because they like its benefits, and they specifically like its price. As the cost of care rises and people use the new services/benefits they have purchased, premiums are increased to fund the claims that will inevitably be filed.

Entire departments of health insurance companies are devoted to the analysis of risk and tasked with predicting which types of benefits will carry the greatest risk of requiring a pay-out of funds for a claim. If costs rise higher than expected due to increased usage or a spike in the cost of care in general, adjustments must be made.

Eventually, the decision is made to phase out a benefit or the entire policy because it has become too expensive to include. Benefits that have been phased out include maternity care and brand name prescriptions. Often the entire policy is phased out.

How Can a Policy be Phased Out?

Phasing out a policy is quite easy to do. The insurer simply decides that as of a certain date, no new sales of that policy will be allowed. Agents are notified in advance of the final sale date and of new policies that are being added to the portfolio to take its place. Marketing of the new policies begins.

What Happens to Existing Policies?

Existing policies generally remain in force, though they can be cancelled. However, as the risk pool (the group of people covered by the policy) becomes smaller, the premiums rise ever higher. A smaller group of people are contributing to the total sum of money available to pay the claims of an aging population. Eventually, most of these people will decide that the insurance is simply too expensive to keep. They will purchase newer, less expensive coverage. Finally, there will be no more people insured with the original policy.

Could We Do This for Non-ACA-Compliant Policies?

Yes. Many consumers, especially in states that have not moved to implement some of the more expensive benefits of the Affordable Care Act (aka, the ACA or Obamacare) in advance, are finding their premiums jumping by large amounts. They are reasonably unhappy about having to pay so much more. It is theoretically possible to allow non-compliant policies to be phased out the way policies have traditionally been phased out. Simply stop selling new ones with effective dates after December 31, 2013. Within a few years, most of these old policies will be gone, because their cost will continue to rise and their slimmer benefits and higher out-of-pocket costs will make them unattractive in comparison with the compliant policies.

Is There a Downside to Keeping Them?

The downside to keeping these non-compliant policies in force is that the risk pool for the compliant policies will be smaller and is likely to include more people with prior health care conditions. Costs will be higher for the nation as a whole because more of the policies purchased will required subsidies for their funding. Prices of compliant policies will have to increase at a faster rate than would normally occur because the amount of money in reserve funds must be kept high enough to cover claims. Remember, most of the currently uninsured population does not have insurance because the premiums are unaffordable or because a pre-existing condition has led insurers to exclude them from the risk pool (by refusing to sell them a policy at any price).

What Can We Do?

We have a variety of options:

1. Allow current policies to continue indefinitely, with their limited benefits and higher out-of-pocket costs.

2. Allow current policies to continue, but stop new sales of them for effective dates after December 31, 2013.

3. Require insurers to modify current policies to make them compliant with the ACA without any increase in premium.

4. Require insurers to modify current policies to make them compliant with the ACA but allow premium increases to cover the cost of the new benefits.

5. Develop a broader range for subsidy eligibility, especially for older consumers who may still find their new ACA compliant policies unaffordable (with premiums over 8% of their income).

6. Stay the course and require everyone in the individual market (about 5% of Americans) who does not have a grandfathered plan to purchase a compliant policy or face a tax penalty.

Time Will Tell

The decision to be made about how to handle the fall-out and sticker shock accompanying the roll-out of the ACA will not be an easy one.The way we choose to transition to a culture of inclusion in health care and insurance will have an effect on the ultimate success of the process.

Stakeholders in this process include insurers, policyholders, providers, and American taxpayers. As long as private insurance companies are the primary source of insurance coverage for individuals and families, the cost of insurance will not go down significantly. The cost of administration, staffing, sales force compensation, and investor profits must be met (though these cannot cost more than 20% of premiums collected). The cost of billing staff for providers (approximately 40% of practice overhead) will not be reduced. Insurers have to charge premiums that cover their anticipated costs both internally and due to the cost of health care.

At Pozos Insurance Services we’re hoping wise decisions are made in the next few weeks so the benefits of the Affordable Care Act’s reforms will be attained in a way that will be fair and cost effective for all involved.


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Policy Cancelled? Get Enrolled and You Can Have Insurance Coverage January 1

As health insurance cancellation letters arrive in mailboxes across the country, anecdotes are circulating about people who are seriously ill and fear they will not have insurance to pay for their medical care after December 31, 2013. Beneficiaries in states whose health insurance marketplaces have been established by the federal government are particularly concerned because the sales website has not worked properly. However, alternative ways exist to enroll in a new health plan and coverage is guaranteed, as long as the policy is purchased within an Open Enrollment period and the premium is paid on time.

Paper Application

Paper applications have been developed for consumers to use for purchasing health insurance through any of the state or federal marketplaces. Download and fill out the application. Send it to the address listed on the application. You will be contacted with information and instructions on how to complete your enrollment in an insurance plan, including what plans are available to you, what they cover, how much tax credit subsidy might be available to help pay for the insurance, and what your cost will be.

Get a paper application right away if you plan to use this method to apply. It will take around two weeks longer than applying on-line. If you absolutely must have insurance in place by January 1, 2014, now is the time to start the process.

Work with an Agent, an Enrollment Counselor, or a Navigator

Certified insurance agents and enrollment counselors/navigators are trained and ready to help consumers get enrolled in health insurance plans.

Certified insurance agents bring specialized training and experience to the table to assist their clients in selecting the plan that will best serve their needs. Since each insurer that offers plans on the individual and family market must offer identical plans and pricing through the marketplace and outside the marketplace, agents will have up-to-date information even if the website is not working well.

Certified enrollment counselors/navigators have also been trained to assist consumers in the enrollment process. These individuals can help answer questions about the application and the process of enrolling. They do not make recommendations regarding which policy might be better suited for an individual or family’s needs. They refer consumers to Certified Insurance Agents when policy selection recommendations are needed.

Enroll On-line, With or Without Help from an Agent

Marketplace websites are improving in reliability and functionality by the day. The federal site,, includes many tools and resources consumers can use to learn about the policies being offered in their county of residence and how much they will cost. The federal site includes links to each state site as well.

For those shopping before beginning the application process, there is a simple-to-use set of questions and drop-down boxes to develop a list of possible plans and their price. Another link takes consumers to the Kaiser Foundation’s calculator that can be used to estimate eligibility for advanced tax credit payments (subsidies) and cost sharing reductions.

Certified Insurance Agents are ready to help consumers enroll on-line. Contact information can be obtained through the marketplace websites. Designate an agent and that person will contact you to answer your questions and help you get enrolled.

It’s a New Day

Prior to the Affordable Care Act, cancellation letters would indeed have spelled disaster for their recipients. Insurers were allowed in many states to cancel coverage in case of high expenses or to set monetary limits on the benefits each beneficiary could receive for medical care. A person dropped from coverage by an insurer could not normally qualify for a policy from another insurer due to a pre-existing condition.

Today, with the coming of the Affordable Care Act (aka, Obamacare), insurance policies all include the same benefits. All legal residents of the country can shop for insurance and enroll in plans through their state or federal marketplace. Those who have been priced out of the market or excluded due to health conditions can once again have health insurance and access to care. Plans even exist that provide minimal coverage at lower prices for those who don’t qualify for subsidies but cannot afford the plans offered on the marketplaces. (These plans require a waiver before they can be purchased by anyone over age 29.)

Consumers can obtain the protection from catastrophic health care costs, paying their “fair share” of the cost of their insurance, while still being able to afford food, shelter, and the other necessities of daily life. All they need to do is enroll by December 15, 2013 and pay their premium by December 26, 2013. Their insurance will be there ready to be used on January 1, 2014.

For Help in Santa Cruz, California

For help enrolling in Santa Cruz County, please contact Kathleen Brewer de Pozos at 831-713-6438. Kathy is a Covered California Certified Insurance Agent and is happy to answer your questions and help you through the process of selecting and enrolling in a plan to meet your needs.

 Se habla Español.

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Affordable Care Act Enrollment Application Links

Paper applications for Enrollment in health insurance plans sold through state and federal exchanges may be found through these links. In states with federal marketplaces, apply on-line through

State Exchanges

District of Columbia
New Mexico
New York
Rhode Island

Utah: State Marketplace for Small business Health Plan Options (SHOP)
Federal Marketplace for Individual

State/Federal Partnerships

New Hampshire
West Virginia


All other states

No Marketplace for Enrollment *

American Samoa
Northern Mariana Islands
Puerto Rico
Virgin Islands

* Check with territorial government offices for health insurance enrollment options.


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The Health Insurance Marketplace is Here

Effective October 1, 2014, health insurance marketplaces in each of the 50 states and the District of Columbia are opening for business. These marketplaces, also called exchanges, are one-stop shops through which consumers can purchase health insurance coverage for themselves and their families. Small business owners can go to the state marketplace to get quotes and insurance for themselves and their employees. Low income citizens and legal residents may also apply for Medicaid coverage for themselves and their families under expanded eligibility rules in many states. In California, these plans are all available through Covered California.

The marketplaces are designed to help the approximately 15% of Americans and legal immigrants who currently purchase their own insurance or who have been unable to obtain insurance due to pre-existing conditions or the high cost of the insurance. Policies are now available that offer affordable insurance and the access to healthcare that they provide. Through a program of tax credits for persons with income from 138-400% of the Federal Poverty Level (FPL), premiums will become affordable for millions of people. These tax credits can be used to reduce the monthly cost of the insurance or they can be claimed when filing income tax returns in the next year.

Small business owners who purchase coverage for their employees may also qualify for income tax credits that help reduce their cost of providing insurance for those employees. Prior to the Affordable Care Act, small business owners were at a disadvantage when they looked for employee health insurance because the pool of insureds was too small for them to get the lower rates offered to large groups who brought larger pools of employees to the table. With the Affordable Care Act’s Small Business Health Option Program (SHOP), small employers will be offered more coverage options, rates that reflect a larger pool of insureds, and options to bring the cost of offering insurance under better control. Some will also receive tax advantages for offering insurance. Through this program, it is hoped that more Americans will join the ranks of those whose insurance comes through their employers.

As the roll-out of the Affordable Care Act continues, more information and updates will be available here. At Pozos Insurance Services, we are committed to helping our clients select the best plans that meet their personal and business needs for health insurance. We look forward to hearing from you.

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